Off-Topic Stock Market & Crypto Discussion

[GladeCane]

Yes, inflation was higher in the last quarter, BUT the economic indicators are showing that the consumer is resilient and the economy is strong enough for a soft landing, figuring in 25 rate increases.
For the first time I heard Jamie Dimon talk about a soft landing and he was as bearish as they come.
I know I’m probably the only optimist on this board, but the economy is strong enough to price in smaller rate hikes and housing, food and energy are dropping for now.
Don‘t neg me bros…

no your not.

 

[mr.h]

no your not.

No I’m not the only optimist or no I’m not seeing prices going down?

ISM manufacturing weakening slightly, but new orders and pricing up…not what the Fed wanted to see.

Right now the US economy is an enigma and the Fed can’t figure it out. We are seeing investors, CEO’s, funds mgt. all having different views And opinions….

 

[SpikeUM]

We are in all new territory. The world printed a MASSIVE amount of money. I just read that JAPAN printed more money than the FED and is still doing QE in the face of inflation over 2% for the first time in 40-50 years. The new chairman of the BOJ starts in April so we shall see if he joins the other central banks in raising rates. The BOJ position offset all of the QT by the FED which could be another reason Q4 saw a bounce vs drop. Combine that with the oil reserves and Jance dumping $1T into the market...

The FED likely can't go above 6% without massive pressure from Capitol Hill. Tax revenue is already on the decline and interest payments on the debt are likely to become the largest line item in the federal budget. Congress needs to move fast to increase the energy supply (nuclear, shale, alternative, natural gas) as that is one of the best ways to beat down inflation long term. Not to mention handling spending.

I'm not sure we will see a real tanking of the stock market as the economy is just too hot. It looks like we will have some cooling to do but there will be big winners in 2023 with some big losers.

Bitcoin demand is likely to jump not because of capital inflows from big money but instead due to developing economies that have currencies nearing failure. IF Bitcoin continues to grab more and more bottom-end market share from the USD, it could end up with a large percentage of world transaction volume on main streets vs wall streets. That would align it more with Visa/Mastercard than the FED. The US government could slow the adoption of crypto in the USA which will further push big money away from it in the near term.

The higher and longer the Fed has to go, the higher the chances for a stock market tank.

From Barron's today, the government spent way too much money the last few years, and is continuing to do so.

Money supply remains 39% higher than it was before the Covid-19 pandemic. In other words, the amount of liquidity in the system is still significantly elevated, and too much money chasing too few goods and services can spell inflation.

 

[mr.h]

The higher and longer the Fed has to go, the higher the chances for a stock market tank.

From Barron's today, the government spent way too much money the last few years, and is continuing to do so.

Money supply remains 39% higher than it was before the Covid-19 pandemic. In other words, the amount of liquidity in the system is still significantly elevated, and too much money chasing too few goods and services can spell inflation.

Agree and what I said previously is that the Fed cannot figure out this economy.

 

[90scane]

The higher and longer the Fed has to go, the higher the chances for a stock market tank.

From Barron's today, the government spent way too much money the last few years, and is continuing to do so.

Money supply remains 39% higher than it was before the Covid-19 pandemic. In other words, the amount of liquidity in the system is still significantly elevated, and too much money chasing too few goods and services can spell inflation.

That money supply isn't going to get QT'd away. BOJ printed more than the FED! Even raising rates won't cause that 39% to drop. Thus, we are at the new norm. The home prices will drop in 2023 and 2024 but bounce right back to new highs in 2025 when rates drop. Stocks will likely do the same With the bottom being 6-12 months after the FED stops hiking.

Agree and what I said previously is that the Fed cannot figure out this economy.

I can't blame the FED. No one can figure out this economy because we are a global economy with massive inputs from many central banks that aren't all acting the same way at the same time. Add in supply chain changes and war.

The real "losers" will be developing countries and countries that aren't as strong economically. This is likely why BRICS nations are trying to work together.

 

[GladeCane]

No I’m not the only optimist or no I’m not seeing prices going down?

ISM manufacturing weakening slightly, but new orders and pricing up…not what the Fed wanted to see.

Right now the US economy is an enigma and the Fed can’t figure it out. We are seeing investors, CEO’s, funds mgt. all having different views And opinions….

Not the only optimist. My market philosophy is that in todays world, market forces can change quickly, but corporations (and, their allocation of capital) can change even quicker. Money, corporations and the strive for profits doesn't sleep.

I view a lot of these micro economic gyrations as just chatter and distractions. In relation to the rest of the world, the US economy and corporations are far and away the undisputed leader. My call is for the markets to explode to the upside sometime this year.

 

[90scane]

Not the only optimist. My market philosophy is that in todays world, market forces can change quickly, but corporations (and, their allocation of capital) can change even quicker. Money, corporations and the strive for profits doesn't sleep.

I view a lot of these micro economic gyrations as just chatter and distractions. In relation to the rest of the world, the US economy and corporations are far and away the undisputed leader. My call is for the markets to explode to the upside sometime this year.

What leads us to the market exploding? Some assumptions 1) FED gets to 5.5-6% and hard stops even with inflation remaining above 2%. 2) Inflation coming down some and more importantly not increasing. 3) Unemployment remains very low. 4) Bank spreads on mortgage rates dropping to 1.9% (average) keeping mortgages around 7-8%. THEN a FED pivot late in 2023 would cause a BOOM.

Let me know if I'm on the right path for you.

 

[GladeCane]

What leads us to the market exploding? Some assumptions 1) FED gets to 5.5-6% and hard stops even with inflation remaining above 2%. 2) Inflation coming down some and more importantly not increasing. 3) Unemployment remains very low. 4) Bank spreads on mortgage rates dropping to 1.9% (average) keeping mortgages around 7-8%. THEN a FED pivot late in 2023 would cause a BOOM.

Let me know if I'm on the right path for you.

yeah, the probability of all that happening is greater then the opposite. And, your point of inflation "not increasing" is the biggest by far.

Everyone wants to be liked, including Jerome Powell. The pressure on him will be intense and I bet he will be looking for any excuse to revert and stop on hikes.

 

[mr.h]

Jobless claims down a little
Non-farm productivity went from 3% to negative
Unfortunately unit labor costs are up..3.2 vs 1.6 expected

 

[TheEye]

The higher and longer the Fed has to go, the higher the chances for a stock market tank.

From Barron's today, the government spent way too much money the last few years, and is continuing to do so.

Money supply remains 39% higher than it was before the Covid-19 pandemic. In other words, the amount of liquidity in the system is still significantly elevated, and too much money chasing too few goods and services can spell inflation.

Markets tank given time. If we have such a surplus in the money supply, the Fed is doing right by discouraging growth via new debt and encouraging high yielding savings. All debt needs to be paid down ASAP.

 

[TheEye]

It seems the mkt. feels that the Fed will raise at lower rates [25] and keep the rates higher, for a longer period, rather than shocking the mkt. with dramatic rate hikes. Hopefully that is priced in.

Do not bet on the Fed lowering rates. Currently, rates are at or even below historic averages. Both private and public debt needs to get paid down before the excess money in the supply starts to dwindle.

 

[mr.h]

Do not bet on the Fed lowering rates. Currently, rates are at or even below historic averages. Both private and public debt needs to get paid down before the excess money in the supply starts to dwindle.

Just to clarify, it looks like the mkt. believes that the Fed will raise at 25 and keep the rates higher for longer, rather than hitting us over the head with a sledgehammer. That is what I understood that they were saying.

ISM reporting tomorrow which are services [non-manufacturing]. Anything over 50 shows growth, but maybe a fraction down from last month.

 

[Cmuri]

 

[mr.h]

View attachment 231914

 

[90scane]

doesn’t matter .25 or .50. Every meeting with a hike means another 1-2 months before they pause and 2-4 month’s extension from any potential decrease of equal size on the other end. Lots of people we’re predicting 5% mortgage rates by June. I’d be shocked to see 5% in 2023. That means lots more pain for a ton of Americans as inflation isn’t dropping, home prices aren’t dropping, and affordability is sky high. Investors that are in bad positions can cashflow out. Stocks are suffering from low unemployment, supply chain issues, lack of liquidity for capital… what a cluster F!

 

[GladeCane]

it has begun.

 

[TheEye]

Just to clarify, it looks like the mkt. believes that the Fed will raise at 25 and keep the rates higher for longer, rather than hitting us over the head with a sledgehammer. That is what I understood that they were saying.

ISM reporting tomorrow which are services [non-manufacturing]. Anything over 50 shows growth, but maybe a fraction down from last month.

Yes. Assume about a full percentage hike annually. That being the case, people whining about high rates today should probably realize they won’t be this low for long. Those looking to make big purchases should start squirreling away money into those short term bonds.

 

[mr.h]

:

Yes. Assume about a full percentage hike annually. That being the case, people whining about high rates today should probably realize they won’t be this low for long. Those looking to make big purchases should start squirreling away money into those short term bonds.

Housing sales for 2023 is showing a significant drop. I’ll try to get the numbers to show 90’scane. We can easily see a 10% drop. You are right that some investors are going into bonds, but cash is king and investors are waiting for an entry point. Lower rate hikes are already priced in for the first half of 2023.
unfortunately earnings will suffer. Yes clusterfuq is where we are now.

 

[mr.h]

10:00

USD

ISM Services Employment Index(Feb)

54

2.19

49.8

50

10:00

USD

ISM Services New Orders Index(Feb)

62.6

0.72

58.5

60.4

10:00		USD	ISM Services PMI(Feb)		55.1	0.17	54.5	55.2

10:00		USD	ISM Services Prices Paid(Feb)		65.6	0.49	64.5	67.8

WOW strong numbers..affecting inflation and employment

 

[90scane]

Powell is going to have to reverse course at some point. When he reverses, the markets will bottom 6-12 months later and I'll start using gun powder to buy real estate and stocks. In the mean time, bonds vs cash and pay down bad debt if you have it. One more investment strategy: Capitol Trades https://www.capitoltrades.com/trades?txType=buy